Microsoft is about to get a little bit bigger.
Early Monday morning Microsoft announced that they will be acquiring LinkedIn for $26.2 billion, or $196 per share, in a cash deal. The deal is the largest in CEO Satya Nadella’s term, where he hopes it will be the “key to our bold ambition to reinvent productivity and business processes.”
The acquisition is a big deal for both companies. While LinkedIn will keep its “branding and product,” it will merge with Microsoft to become part of their “productivity and business process segment.” For LinkedIn, the deal puts them in contention for a higher value for investors, while allowing Microsoft to be at the forefront of the “business worker’s world.”
This isn’t the first time Microsoft attempted to get involved in social networking. Microsoft experimented with their own social network, SharePoint, where they hoped to gain momentum to be the go-to business platform. However, popular chat app, Slack, beat them out in competition. Microsoft also acquired social collaboration company, Yammer, in 2012 for $1.2 billion, yet no major progress has been made with the company.
“Microsoft wanted to get into human resources without having to get into payrolls,” Ray Wang, an analyst with Constellation Research, shared with Recode.
The deal isn’t surprising for both companies. Microsoft was looking for a new project after their collaboration with Salesforce never panned out, while LinkedIn shares fell 43% after poor fourth quarter reports.
The deal between the two companies is expected to close later this year. LinkedIn CEO Jeff Weiner will remain the head of the team. See Weiner’s full statement to the company here.